2018 is a watershed year for factual content in Asia, mostly because Discovery has swallowed Scripps, but also because the entire linear proposition of old is being reimagined, significant changes are afoot, major energy is going into online originals, and there’s high demand for more local stories.

Over the next few months in Asia, like everywhere else in the world, Discovery Inc will digest its US$14.6-billion dollar acquisition of Scripps Networks Interactive. Perhaps surprisingly, the majority of buyers and distributors operating in Asia’s factual space don’t expect the acquisition to impact their business in the region. Asked about how their worlds will change with a larger Discovery and no Scripps, 57% of execs told us it won’t. The 43% who are braced for change say they expect prices to rise and some linear channels to fall off the grid as a direct result. Although the future doesn’t look like it is going to be kind to bloated channel bouquets, some still think that the new Discovery Inc in Asia will attempt to push its full linear bouquet onto pay-TV platforms. Other say “good luck with that”.

Inside the two operations, the adjustments will be massive, with the biggest changes happening in Singapore – the Southeast Asia HQ for Discovery and the regional HQ for Scripps.

As this issue went to press, integration teams from both sides were eyeball-deep in figuring out logistics, but nothing had been announced. Widespread job losses feared in the wake of the US$350-million global “cost synergies” that were among the deal drivers were still hanging heavy.

Discovery has a significantly bigger presence and a much longer history in Asia than Scripps, but it’s no secret that business is way down and the reinvention for a millennial audience has taken longer than expected. That Discovery Inc’s workforce in Asia will shrink is a given. And not entirely because of role duplication with Scripps.

The axe started to fall in January this year, two months before the Scripps acquisition was finalised. Up to 50 people – said to be primarily from corporate functions – were shown the door as Discovery Networks International president and chief executive, J.B. Perrette, rightsized an operation past its heyday and bringing in a small fraction of what it used to. Discovery has not confirmed the number of people let go.

Perrette says the January streamlining was part of a focus on investment in priority areas – content and digital/direct-to-consumer products. “We are delayering the organisation so that we can ultimately spend more money on the content and the digital products,” he says, adding that this is a response to broader industry dynamics and the pace of change.

Perrette says Discovery is looking to continue leadership in the enthusiast community and specialty verticals, such as survival and adventure, and “dive deep into developing super-fan products for those audiences”. As a result, the company “is trying to find every efficiency we can” across its global operations.

The new structure moves forward with some of the logic put in place under the most recent Asia-Pacific president and managing director, Arthur Bastings, who exited at the end of 2017. Perrette has confirmed that the regional MD role will not be resurrected. Country general managers now report directly to Perrette. Possible expansion of headcount on the ground in China and India is still a possibility, although if new Indian general entertainment channel, Jeet, doesn’t turn around its disappointing debut, India may be looking increasingly vulnerable.

“We are focused on emphasising local leadership teams in specific markets,” Perrette says. This is a continuation of the strategy put in place under Bastings. “We are not writing a new book or creating a new strategy,” he adds, confirming that Singapore will remain a “major hub” for Discovery and the home of its regional broadcast operations.

Although linear channels remain a firm part of Discovery’s business, the bouquet in its current form is unlikely to survive the pivot. The company currently operates 10 channels in Southeast Asia (Discovery Channel, TLC, Animal Planet, Eve, Science, DMAX, Discovery Kids, Discovery Asia, Eurosport and Setanta), and 15 channel brands across the Asia Pacific.

Perrette says attention on linear channels is being refocused rather than de-prioritised. “We are not immune to general trends… some of that has already happened. There has been culling of the portfolio and over time it is inevitable,” he says, adding: “We are very focused on digital products, but we are also very focused on continuing to maximise the linear side… we are in some cases investing more in the linear business”.

Perrette describes the investment in Indian general entertainment channel, Jeet, as “probably the single largest non-sports related new content investment made across the company”.

Jeet (a Hindi word that means ‘victory’) is Discovery’s first-ever general entertainment channel, and carries great hopes for a turnaround in a market of 240 million homes where Discovery’s 12-channel network lost about 22% viewership over the three years to mid-2017, according to Broadcast Audience Research Council (BARC) data.

Jeet went live on 12 February with an “underdog winning” line, three hours of original content a day in a five-hour programming band against 24-hour schedules programmed by the mightier-than-ever STAR India, ZEE Entertainment, Viacom18, Sony Entertainment Television and others.

The channel debuted with carriage in 100 million homes across India, most, if not all, of which was paid for in a massive bet that young men would come flocking. They didn’t. Or they haven’t so far.

The Mumbai-based service, which replaced the old Discovery ID on India’s pay-TV dial, was said to be commissioning 1,000 hours of original content for 2018. The channel line-up, targeting young men, includes a local version of survival format Man vs Wild, starring former porn-star and one-time Penthouse Pet of the Year, Sunny Leone (Jism 2, Desi porn site sunnyleone.com) “showcasing her adventurous side… [undertaking] many difficult stunts and adding a dash of humour with her vivacious personality”. The latest rumour is that the series didn’t survive long enough to make it onto the schedule; Discovery India isn’t commenting on either that or Jeet’s less-than-stellar ratings.

Will Discovery India/Jeet’s “underdog” tactics provide cover for a late entry to a fierce GE market that has, at one time or another, chewed up and spat out the likes of Turner and NBCUniversal? Or compensate for way less funding and market nous than slick, entrenched and experienced rivals?

Ratings say no. Two weeks after the channel went live, Jeet had not made a dent on a list of entertainment channels topped by Sony Pal, STAR Bharat and Zee Anmol. Even on the smaller factual chart, week nine GRPs put Jeet in fifth place out of five.

Aside from what it does next with India, a big question hangs over what it does with Scripps, a smaller, tighter, more focused and better-run operation in Asia. Scripps ramped up its channels presence in Asia only four years ago, buying Asian Food Channel (AFC) for about US$65 million and opening a regional office in Singapore. The operation runs four channels – AFC, Food Network Asia, HGTV and Travel Channel.

The greatest crossover is probably with Discovery’s lifestyle channel, TLC, in a factual space that has gone nuts on lifestyle.

More than 70% of factual buyers and programmers in Asia have lifestyle programming on their priority lists.

Elsewhere on the factual landscape in Asia, wildlife remains popular. ContentAsia’s factual survey in the run up to MIPDOC 2018, showed 57% of buyers and programmers put wildlife second only to lifestyle.

Wildlife distributors say the appetite for the genre remains strong, “in particular blue-chip natural history films with minimal human presence” says Polina Axenova, sales and acquisitions manager for Albatross World Sales.

China, Hong Kong, Japan, South Korea, Taiwan and Thailand are among the top factual markets in Asia, delegates at the eighth edition of factual fest, Asian Side of the Doc (ASD), in Bangkok in January heard. Science, travel and food as well as feel-good programming are also key in Asia.

Gunny Hyoung, executive producer at EBS Korea, says, “Asians are very emotional, that’s why people in Asia prefers to watch human or family-related subjects.” Valentin Romero, managing director, 3Boxmedia International Sales, says buyers are “looking for quality productions linked or talking directly about the region, even if they like quality productions from other parts of the globe.”

ContentAsia’s new factual report also asked platforms in Asia what had the biggest impact on their business in the past 12 months. Vitto Lazatin, VP, content acquisition for Cignal TV (Philippines), said cost, while Lucy Simanjuntak, senior product manager for Indonesia’s Nexmedia said the availability of free content online.

Joe Suteestarpon, founder of Thailand’s Mediaplex International Company Limited, outlined dual impacts of licensor expectation and piracy. “As OTT in Thailand is still considered as new (versus many existing digital terrestrial players), factual licensors tend to have high expectations on OTT players in terms of pricing. Piracy also remains the pain right now, so we need to focus on local content to differentiate ourselves from other players.”

Asked what they would most like to see next, every single one of the respondents said more factual production in Asia. 29% said more local/international co-production and collaboration, and 14% said more factual content added to mobile video bundles. And therein, perhaps, lies an answer for the new Discovery Inc.

​Published in Issue One of ContentAsia's inprint+online 2018 (4 April 2018)